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07/21/2008 Special Joint MeetingSPECIAL JOINT MEETING MONROE CITY COUNCIL UNION COUNTY BOARD OF COMMISSIONERS UNION COUNTY GOVERNMENT CENTER S00 N. MAIN STREET PERSONNEL TRAINING ROOM -FIRST FLOOR JULY 21., 2008 - 5:30 P.M. AGENDA www.monroenc.or 1. Discuss General Issues of Mutual Concern A. Monroe Natural Gas Pipeline Project B. Sewer Update C. Veterans Day Air Show D. Charlotte-Monroe Executive Airport . 1 " Special ]oint City Council Meeting July 21, 2008 Fage 55 SPECIAL JOINT MEETING MONROE CITY COUNCIL ' UNION COUNTY BOARD OF COMMISSIONERS UNION COUNTY GOVERNMENT CENTER 500 N. MAIN STREET PERSONNEL TRAINING ROOM -FIRST FLOOR -3ULY 21, 2008 - 5:30 P.M. MINUTES The City Council of the City of Monroe, North Carolina, met in a Special Joint Meeting with the Union County Board of Commissioners in the Union County Government Center, 500 N. Main Street, Monroe, North Carolina, at 5:30 p.m. on July 21, 2008, with Mayor Bobby G. Kilgore presiding on behalf of the City. City Council Present: Mayor Bobby G. Kilgore, Mayor Pro Tem P.E. Bazemore, Council Members John Ashcraft, Billy Jordan, Lynn Keziah, Dottie Nash, Robert J. Smith, City Manager F. Craig Meadows, City Attorney Terry Sholar, and City Clerk Bridgette H. Robinson. City Council Absent: None. Union County Board of Chairman Allan Baucom, Commissioners Roger Lane, Parker - Commissioners Present: Mills, Jr., Lanny Qpenshaw, County Manager Al Green, and Clerk to the Board Lynn G. West. Union County Board of Vice Chairman Kevin Pressley and County Attorney Jeff Crook. Commissioners Absent: Visitors: Russ Colbath, aim Fatland, Pete Hovanec, Don Mitchell, and others. Chairman Baucom reconvened the Union County Board of Commissioners Work Session of July 21, 2008 to order at 5:40 p.m. A quorum was present. Mayor Kilgore called the Special Joint City Council Meeting of July 21, 2008 to order at 5:40 p.m. A quorum was present. Item No. 1. Discuss General Issues of Mutual Concern. A. Monroe Natural Gas Pipeline Proiect. Energy Services Director Don Mitchell provided an overview of the Monroe natural gas pipeline project. He stated that the City was planning to construct 43 miles of natural gas transmission pipeline. This would be a 12-inch steel pipeline Special Joint City Council Meeting July 21, 2008 Page 56 beginning in southern Iredell County, continuing through Iredell County and Cabarrus County into Union County and would tie in with the City's existing natural gas utility. The pipeline would tie in around the Unionville-Indian Trail Road area. Mr. Mitchell stated that in the late 1990saround 1998, the City started looking at the possibilities for future supply for natural gas for City customers. He advised that the City was currently being served under a contract with Piedmont Natural Gas Company (formally North Carolina Natural Gas) and had been since the late I954's.. Mr. Mitchell stated that the contract with Piedmont expired in March 2010. The City started in 2002 seriously looking at other alternatives. He advised that the City has gone through a process where all natural gas providers in the southeastern United States were asked to provide proposals for serving Monroe. Mr. Mitchell stated that the City noted that there were several companies willing to build a pipeline from the Transcontinental pipeline to Monroe to serve the area. He stated that the City hired a consulting firm to further research the matter. As a result, Mr. Mitchell stated that since 2002 the Ciry has been developing a project to build a pipeline to offset what Piedmont provides to the City. Mr. Mitchell stated that the current contract with Piedmont allows the City to move 20,000 decatherms of gas through the Piedmont system into Monroe on a daily basis. He stated that the City had tried to negotiate with Piedmont to get better terms and more capacity; however, these negotiations have not been successful. Mr. Mitchell stated that the proposed pipeline would be able to provide 69,000 decatherms a day of capacity to Monroe. This is more than three times the current contract capabilities. He stated that the debt service on the pipeline pro}ect is projected to be less than what the City is currently paying Piedmont Natural Gas. Mr. Mitchell stated that the City felt that long-term, this would be the best thing for Monroe and its natural gas customers. He stated that the City served customers not only in Monroe but also Wingate, Marshville, parts of Unionville, and other parts of Union County. Mr. Mitchell stated that once the debt service was paid, the pipeline would be the property of the City and would be a good investment for Monroe's customers. Chairman Baucom asked if the City was eligible to sell natural gas anywhere in Union County. Mr. Mitchell confirmed that was correct. Chairman Baucom asked about if the natural gas line that came through Stanly County belonged to Transcontinental. Mr. Mitchell stated that this was a Piedmont Natural Gas line. He explained that the Transcontinental Pipeline ran from the Gulf of Mexico to New York. The closest location to Monroe is in southern Iredell County. Chairman Baucom asked if the citizens of Fairview would be eligible to receive natural gas service off the proposed pipeline. Mr. Mitchell stated that the pipeline would run along Highway 601. The entire length of Highway 601 will not only carry the steel line but also a plastic line for distribution service all along Highway 601. He stated that natural gas service would basically be provided from Brief Road along Highway 601, to just north of Lawyers Road. He stated that service could also be provided south from there, if there was enough demand or potential sales. Mr. Mitchell stated that if along Highway 601, there were subdivisions built close by that would justify the capital expense to extend natural gas service, the City would offer service to these Special Joint City Council Meeting July 21, 20U8 Page 57 areas. Mr. Mitchell stated that the City had been in the natural gas business since the late I950's and connecting new customers is what the City would like to do. Chairman Baucom stated that with atwo-inch Iine anyone adjacent to Highway 601 could tap on without having to meet any qualifiers. Mr. Mitchell stated that this would actually be a four-inch line large enough to expand service. County Commissioner Openshaw asked if the rationale for expansion was to increase customer base and was not limited by modifier. Mr. Mitchell stated that City Council has always been willing to provide services to a new development if staff could show that there would be a sufficient payback. County Commissioner Openshaw stated that it had been mentioned that Monroe could go _ anyplace that Piedmont could not and that it had also been mentioned in the newspaper that Monroe was an unregulated utility. He asked what would happen if Piedmont decided to go into that area. Mr. Mitchell stated that Piedmont could go into that area. He advised that Piedmont has the right to serve all of Union County. Mr. Mitchell stated that by State laws, the City also has rights to serve any place in Union County. He stated that if there was large enough development to justify the expense the City would offer service. City Manager Meadows stated that the City was not providing natural gas service to complete with Piedmont. He stated that the City was providing natural gas to serve the citizens and the customer base. However, Mr. Meadows stated that if there were opportunities out there that make sense for the City to consider, then the City would take that into consideration. Mr. Mitchell stated that in response to the comment about being "unregulated," rates for the City of Monroe are regulated by the Monroe City Council. He stated that the City was under Federal laws just as Piedmont is. He stated that the Pipeline Safety Act applied to Monroe just as it does to Piedmont Natural Gas. He stated that the City was regulated and inspected regularly. County Commissioner Openshaw commented on the statements made in the newspaper concerning Piedmont's regulation. Mr. Mitchell stated that Piedmont's rates are regulated by the North Carolina Utilities Commission and Monroe's rates are regulated by the Monroe City Council. County Commissioner Openshaw stated that he had visited the site of the pipeline in Fairview and that he understood the concerns about the location. He stated that the pipeline was going to be at the intersection of the improved Highway 218 and Highway 601 North, which is the economic center of Fairview. County Commissioner Openshaw asked if pipeline would require 30 foot easements. Mr. Mitchell advised that it would be an approximate 20 foot easement. County Commissioner Openshaw stated that there was a 20 foot perpetual easement that was going to impact three of the four corners of the intersection. He stated that the plus was there would be natural gas and the minus was there was atwo-lane road which was going to be expanded to four lanes with turn lanes, Department of Transportation right-of--way, and a 20 foot easement for the gas line. He special Joint City Council Meeting July 21, 2008 Page 58 1 stated that this was a lot of property. Mr. Mitchell advised that at the intersection of Highways 601 and 218 the pipeline will be on the western side of 601 in a 20 foot wide easement adjacent to the DOT right of way. This property is currently zoned residential and as such has a zoning - set back requirement of 40 feet from the road right of way. Thus the easement in question falls wholly within the zoning set back. The easement for the natural gas line should not hinder anyone's ability to develop the land. With regard to the perpetual easement, County Commissioner Openshaw asked if trees could be planted. Mr. Mitchell stated that trees could be planted as long as they did not grow exceedingly large. Small bushes and plants could also be planted. County Commissioner Lane stated that during a conversation with Phil Williams of Piedmont Natural Gas, Mr. Williams advised that Piedmont Natural Gas could give a better deal. City Manager Meadows stated that the City has had numerous conversations with Piedmont Natural Gas and the City has been waiting patiently for a response; however, Piedmont has not provided an acceptable response to the City as to what they planned to offer. Council Member Smith stated that the City had been waiting for a response from Piedmont Natural Gas for six years and the City could not afford to Iet industries continue to suffer. City Manager Meadows stated that the City was looking not only at the short-term, but also the long-term and once the pipeline is paid for, it would secure along-term source of natural gas that is secured to Union County and is controlled by municipal government which looks to take care ~ Council Member Ashcroft stated that the capacity was increasing over threefold. He advised that the City tried to project out 50 years and in looking at industrial and commercial base that far out, the City needed to be able to have a supply that will meet that demand. He advised that in discussions with Piedmont Natural Gas, they advised that they could not provide a guarantee for that supply. County Commissioner Openshaw stated that what he liked about this proposal was that it was competition. He stated that he was not a big fan of monopolies and the fact that the City was bringing in another source making this competitive was a good thing. He stated that his primary concern was dealing with other residents of Union County, and in this case, primarily the Town of Fairview. He stated that he would like to see a good faith effort made to try to work out issues with Fairview and recommended that the matter be mediated by the County Manager to see what could be worked out. City Manager Meadows stated that this would be a decision of City Council. He stated that he, Mr. Mitchell, and a consulting engineer, Kelly Kinnett attended a Fairview Town Council meeting and tried to answer questions. .He advised that some of the questions could not be answered because they were simply apposed to the pipeline; however, questions that could be answered were answered. of not only the citizens of Monroe but all of Union County. Special Joint City Council Meeting July 21, 2008 Page 59 County Commissioner Openshaw asked the City to discuss the projected residential rates versus Piedmont's rates. City Manager Meadows stated that the fundamental difference between what the City charges now and what will be done with the pipeline is right naw the City has to pay Piedmont a transportation fee. What the City is projecting is that the debt service for the pipeline project will be less than what the City is paying Piedmont for transportation expenses. County Commissioner Openshaw stated that the City had been advocating that there would be lower rates for residential customers. He asked if staff had done any projections for a price structure and if there was any guarantee for the taxpayer. Mr. Mitchell stated that the current monthly payment to Piedmont rolls in with the cost of gas as a factor in our pricing, and this is what the debt service will do; however, when the debt service goes to zero the cost to our customers will go down. Mr. Mitchell stated that when the budget is approved each year, City Council adopts a Fees Schedule and Council has made it very clear that they want to see electric, natural gas, and water rates as low as possible. Chairman Baucom asked if this matter was time sensitive. Mr. Mitchell advised that the City would be opening contract bids for construction in September 2008, all right-of--way needs to obtained by November 2008, and construction is planned to begin in December 2008 or January 2009. Item No. 2. Sewer Update. Water Resources Director Russ Colbath stated that since the last presentation on April 1, 200$, City and County staff have been working on the framework of a draft agreement. He stated that City and County staff were meeting next week to continue with the discussions. Once a final agreement has been drafted, it will be presented to each board separately for input and review. Assistant County Manager Matthew Delk stated that from the County side, staff was in the process of preparing questions and the actual draft contract. He advised that plans were to present the agreement to the boards in early fall. Item No. 3. Veterans Day Air Show. With regard to the upcoming Veterans Day Air Show, County Commissioner Mills felt that the spectator transportation situation needed to be taken into consideration. Economic Development and Aviation Directar Chris Plate provided an update on the two-day event to be held at the Charlotte-Monroe Executive Airport on November 8 and 9. He also advised that staff was working to ensure that adequate transportation and parking was provided for this event. Item No. 4. Charlotte-Monroe Executive Airport. Council Member Keziah provided an update on the Charlotte-Monroe Executive Airport. He advised that the runway was being expanded to 7,000 square feet and that it was being projected that within six to ten years, the airport should be a $1 billion airport in terms of based aircraft. Special Joint City Council Meeting July 21, 2008 Pagc 60 There being no further business, the Special Joint City Council Meeting of July 21, 200$ adjourned at b:45 p.m. Attest: B by G. re, ` o~ Brid tte H. Rabin ~an, Cv Clerk ~` Special Joint City Council Meeting July 21, 2008 Page 61